Miners forced to renegotiate access

The NSW government is under pressure to amend the state’s Mining Act after industry warnings that a landmark NSW Supreme Court ruling could paralyse mining exploration and jeopardise billions of dollars in royalties.

The government is yet to reveal what action it will take, but Mineral Resources Minister
Ian Macdonald
has rejected farmers’ views that the judgment shores up their rights, arguing instead that it has negative implications for miners and farmers.

The effects of the judgment are beginning to be felt, with
Rio Tinto
’s Northparkes copper and goldmine last week suspending exploration to renegotiate access agreements it had struck with more than 170 land holders.

Justice Monika Schmidt found on March 5 that orders from the state’s mining warden giving
BHP Billiton
access to explore on farmland around the Liverpool Plains were invalid because the mining company had not notified banks and others with an interest in the properties.

This interpretation of the Mining Act cast doubt over the validity of thousands of access arrangements that mining companies had struck throughout the state, following the normal industry practice of dealing only with the land holder.

The judgment extends the definition of “land holder" under the Mining Act to mortgagees and others such as electricity providers who have an easement on the property to access power lines.

If the judgment stands, mining companies would need to notify all interested parties that they were seeking access, potentially making the process more onerous and expensive, particularly if a land holder opposes access.

Farmers on the Liverpool Plains, who fear that mining could disrupt the region’s underground water aquifer, argue that the court ruling is the correct reading of an act which had too often been interpreted to facilitate mining at any cost.

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But on April 1, BHP Billiton lodged a notice of intention to appeal, saying the court’s decision “creates significant practical difficulties, not only for resource companies but for landowners and banking institutions as well".

And the NSW Minerals Council has told the state government it could stymie exploration and slash mining royalties, which last year contributed more than $1 billion to state coffers.

The council’s chief executive, Nikki Williams, said the decision by Northparkes last week showed the judgment was already causing “considerable disruption" as the industry assessed its legal obligations.

But NSW Farmers’ Mining Taskforce chairman Fiona Simpson accused the mining industry of exaggerating the disruption caused by the ruling, which she said confirmed mining companies had for years been taking short cuts and not abiding by the law.

“Mortgagees and others listed on the title should be properly consulted about developments that could affect their interests and investment," she said.

Mr Macdonald said the government was still seeking legal advice about the best way forward, given the complexity and ongoing ramifications of the judgment.

But he wrote in rural newspaper The Landlast week that the decision had eroded farmers’ rights by giving other interested parties an equal right to negotiate access and potentially delay agreement with a mining company.

Farmers warn that any move to restrict the definition of “land holder" in the Mining Act will have consequences for other legislation.